The Importance of Having Empathy as a Business Owner
Business is easy during good times. But when things get tough, don’t forget the empathy that made you successful in the first place
There’s an obvious pattern that I’ve noticed over the last decade-plus that I’ve been running companies. When it comes to relationships with other companies, either above or below you in the supply chain, people tend to treat you better in good times and worse in bad times. I’m not revealing anything groundbreaking about human nature here, but follow me for a bit.
Anyone can run a business successfully when things are going well. When the economy is strong, when your competition has recently filed for bankruptcy, when the market has adjusted ever so slightly in your favor, you can send a chimp into the office and they’ll likely be able to do your job just as easily: employees are happier, suppliers are easier to deal with, customers are knocking down your door to buy from you. Not much to do other than let the good times roll.
It’s when times get tough that people’s true characters reveal themselves. So many people run their business in a way that continued growth is required just to have enough cash to pay last week’s bills. My companies have never done that, which is why we’ve outlasted most of our competition over the course of a half century. But those that do rely on constant growth to pay their bills begin to panic. And when we panic, we tend to look for scapegoats – anyone we can blame other than ourselves.
And sometimes it’s not even our own fault. Sometimes, it’s the economy. Sometimes, it’s an outside force that we have no control over. But I’ve realized that the biggest issue that arises during these periods is a complete eradication of empathy. When times are tough, many people in business tend to stop thinking about anything outside their walls, to a fault. That’s not an irrational feeling – I was always taught that no one will look after you better than you. To paraphrase, no one will look after your company better than you.
But a need to focus a bit tighter on your own company is not mutually exclusive when it comes to having empathy for the people you do business with. I’m a firm believer that all business is relationship-based. You can be the lowest-priced company in your entire industry, but if people hate doing business with you, you will fail in the long-term. We were recently at a trade show, and while in the men’s room1, we overheard a group of people complaining to each other about one of the largest companies in our industry and how much they hate that they’re “forced” to buy from this company. The reason was because they feel the company does not care about any of their customers. Everyone is a number to them.
That’s essentially empathy, or lack thereof. Scientific American defines empathy as “the capacity to understand what someone else is thinking and feeling. It is distinct from sympathy, which may imply pity…and from compassion, which involves a desire to ease someone’s plight.” Empathy doesn’t necessarily mean you can do anything about someone’s concerns. It simply means you legitimately work hard to ensure they are heard and that they know you care for them.
There has been a good amount of research done on empathy and how it affects personal relationships. Less research has been done on its effects on business relationships, but we can fairly easily extrapolate the data to the business world. Not surprisingly, those with higher levels of empathy generally have higher levels of well-being and social cohesion.
People who feel heard and understood also tend to feel safer, and their fight-or-flight response recedes. This opens the door to better communication, stronger relationships, and furthers their own use of empathy in a subconscious “pay it forward” sort of way.
There is even neuroscience research on this topic. When researchers connect people to an fMRI scan (which maps brain activity) and show them a clip of someone going through a difficult ordeal, regions of the brain light up that normally process pain and encode information about others. Evolutionarily, empathy is crucial because as a social species, we needed the help of others to survive during our earlier days. Empathy promotes survival through shared knowledge, shared cooperation, and mutual support.
So when business hits a rough patch, why do so many people lose their empathy? It may be human nature to become more insular. Most people understandably believe that they reached success in business because of their hard work. And certainly that’s a large part of it. But another part is the role that those around you played (as well as dumb luck). No one reaches the pinnacle by themselves, no matter how hard they work.
When business gets tough – and I’ve been witness to three or four “down” cycles since I joined our family business nearly 15 years ago – we implore our staff to try and double down on their empathy. If business is down for us, that means it’s likely down for most others in our industry as well. We try to reach out to our better customers and just ask how things are going. We want to hear what they’re seeing, see if there’s something we’re doing that is making it difficult for them, and find out if there’s anything we can improve in the meantime. While this doesn’t technically help our own business financially2, it shows our customers that we understand that business is rough at the moment, and we want to be there as a partner. Also – and this is going to shock you – we do legitimately care how our customers are doing. Our customers allow us to continue to operate and to pay our staff, so why wouldn’t we have a strong interest in their well-being?
On the flip side, there are a few select suppliers of ours that go through this very-difficult-to-follow cycle every few years: strong business begets friendliness and happiness. Poor business begets anger, finger-pointing, and policy changes. Strong business begets friendliness and happiness again. Poor business begets anger, finger-pointing, and policy changes. At this stage, we know who these suppliers are, so it’s almost comical when the cycle progresses. But I can promise you one thing: when they get back into their happiness phase, we don’t buy it for a second. And it certainly affects how strongly we market their products and how often we prod a customer toward a different brand. Someone’s empathy during good times is worthless to us when we know it disappears as soon as business turns the other way.3
When you ignore the empathic side of your brain, you may feel you’re just trying to protect your business in the short-term. In the long-term, you will irreparably damage the relationships that you worked so hard to build over the years. Remember the expression “Trust takes years to build, seconds to break, and forever to repair”? Social relationships work the same way. The years you spent building that relationship with an industry colleague can be smashed to pieces in just a few emails.
If you feel you can only succeed in business by bowling your way over others and thinking only about how a decision affects your company, you should probably get out before you even start. Because once business is good again, your suppliers and customers will immediately look for other options. No one will remember how hard you worked to protect your company. But they will certainly remember how you treated them in the process.
A historically excellent place to do business, amirite?
“Thanks for asking! Here’s $1,000!”
For years we always thought it was us. Then we discovered through friendly relationships with some competitors that certain suppliers do this to all of their customers. It’s not that there’s something specifically problematic with us. It’s that these suppliers are just assholes.